As experts predicted, the situation on the retail real estate market began to change. Just a year ago, it seemed absurd to talk about the time when power on it would pass from the landlord to the tenant. In winter, however, tenants turned from talking to action. The proof of this was the 6th international exhibition "Mall", which took place in early April in Moscow.
The anti-crisis business forum, included in the Moll program, gathered the whole world of Russian development, which very emotionally discussed the current situation. Meanwhile, most of the major Russian retailers this time ignored the meeting. They did not even pay attention to the special conference “Retail-2009: where are we going?”. Although a year ago, none of them would have refused an extra meeting with landlords. But their current actions suggest that the roles have changed and the retail real estate market has been turned upside down, as developers say.
What happens to rental rates?
For the last two years, retail has been going to all kinds of exhibitions and conferences, time after time raised a painful question for itself about unrealistic rental rates, was indignant, complained, angry, snapped. Still, the conversation with the developers was short: if you don't want to pay, goodbye. The struggle for a place in a competent shopping center was so great that retail "squeaked, but paid."
The indignation of retailers reached its limit in the first months of the crisis, when sales fell and rental prices remained the same. A wave of so-called “cartel letters” began, in which retailers in whole groups demanded a reduction in the rental rate or a transition to paying rent depending on turnover.
Initially, developers were outraged, but on the sidelines they were already talking with individual tenants, agreeing on an adjustment to the rental rate. “The negotiation process has become an everyday reality for us,” said Andrei Sukhov, First Deputy Director of Manezhnaya Square Management Company OJSC. - Leaving us, retailers immediately sign up in line for the next meeting. And this war of nerves has been going on since November. It seems that the retailers organizedly agreed to bend the landlord in order to minimize the rental rate. In this regard, today we have already exceeded the annual plan for the replacement of tenants by 4%. ” Meanwhile, Okhotny Ryad, apparently, does not intend to reduce rental prices. And other developers fully support these actions, arguing that by lowering the rate to one tenant, you potentially reduce it to everyone else.
Nevertheless, most shopping and entertainment centers (especially district and regional ones) make concessions. This was stated by the director of the department of retail space in Russia and the CIS, Jones Lang LaSalle, Alexander Tishkov: “Of course, today we need to meet the tenant: reduce the rental rate, fix it in rubles, assign a percentage of turnover. After all, the business engine is a successful tenant, of whom there are few now and therefore they need to be valued. ” Mr. Tishkov noted that in three new projects, his company did not lose a single tenant. Meanwhile, they agreed to give them a discount only in March, when special sales failures were observed. At the same time, for good facilities the discount did not exceed 15%, for medium ones - 20%. In both cases, tenants entered into temporary agreements that will be reviewed in three months.
An ambiguous attitude among developers is causing the transition to linking the rental price to the percentage of turnover. It is worth clarifying here that we are talking about a fixed rate plus a percentage of turnover, and not about a bare percentage as such. So, Andrei Sukhov believes that this is the biggest mistake of the developer, because, getting the desired percentage, the tenant falls asleep, does not seek to increase turnover, but pays as much as it turns out in the end. In turn, the executive director of Colliers International Maxim Gasiev insists that in two years the payment of rent with a percentage of the turnover will become a standard practice. “A year ago, working on a percentage basis was rare, but today such iconic retailers as Zara, H&M, Gap do not go to a regional shopping center on other terms. And they come at a percentage of the turnover without a fixed part, ”adds Mr. Gasiev.
Developers do not want to switch to a percentage of turnover for another reason. If there is no question of transparency of cooperation with large networks, it is common for individual entrepreneurs or local networks to dissemble, hiding their true incomes. Tatyana Medvedeva, general director of the Volgograd group of Diamant companies, said that in her practice there were cases when, working on a percentage of turnover, tenants hid the third cash desk. Unfortunately, developers have not yet come up with an exact recipe on how to deal with this phenomenon, although there are options. So, the general director of Watcom LLC Roman Skorokhodov shared his story, as he once proposed to tenants to establish a single cash system - a “common cash desk”, which would help make reporting more transparent. However, citing technical requirements, tenants decided that this system was not suitable for them.
There is one more question that management companies are very interested in: how can they plan the annual budget if tenants work at a percentage of turnover? By the way, he remained unanswered. The conclusion reached by the developers turned out to be tough in the spirit of the times: if the tenant cannot pay the rental rate, then there is no need to save him by giving a discount. He dies and becomes not interesting to the buyer, and thereby undermines the image of the shopping center. Therefore, it is best to say goodbye to him, exchange for a stronger one, because the law of natural selection has not been canceled.
How to operate a shopping center in a crisis?
In a difficult situation, not only developers. For sellers, the forecasts for the 2009 year are also unfavorable forecasts. Tatyana Matyushina, Deputy General Director of Market Masters Consulting Agency, spoke about the decline in the B2C market capacity to the level of 2002 of the year. In her opinion, the demand in the clothing and footwear sector (especially for single-brand boutiques) may decrease by 30-40%. “There is a kind of leaching of the middle class, from 23% in 2008 to 16-18% by the beginning of 2010,” continues Tatyana Matyushina. - The average time spent by a customer in a shopping center has already been reduced by 30%, and the frequency of family shopping is also decreasing. In the near future, economical trading formats will be of particular interest to consumers ”(for other forecasts of consumer behavior, see the article“ Summer will be tough! ”, FASHION report, #7).
Statistics suggest the following scenarios: the migration of visitors from “expensive formats” to cheaper ones and the transition from lower-quality shopping centers to better ones. What to do, how to act to stay in the market? Tatyana Matyushina advises not to reduce, but rather, increase the marketing budget, focusing on BTL campaigns and event marketing. By the way, this is supported by the lion's share of the conference participants. It is believed that discounts are now more effective than bonuses (an alternative opinion that you should not get carried away only with price offers is in the article “How to sell to those who do not want to buy” in the same issue), which means you should consider whether the shopping center has a single discount system , and if not, it makes sense to think about its introduction. In addition, Tatyana Matyushina recommends diagnosing the demand for the object. The General Director of South Pole LLC Leonid Pomerantsev believes that in today's conditions it is important to preserve qualified personnel: “You trained these personnel yourself, invested in their training. Parting with them now is a big mistake. ”
In turn, Alexander Tishkov cited a whole list of transformations in shopping centers where you can save money, and outlined those that should not be sacrificed. It allows reducing the number of security posts inside the building (excluding parking), if it is possible to strengthen the video surveillance system, saving on the services of a cleaning company and buying cheaper cleaning products. Temporarily, you can reduce the cost of paying for mobile communications for office employees, transportation costs, and abandon the bonus program for encouraging staff. For some period you can forget about the placement of signs and outdoor advertising in the city.
But Alexander Tishkov still does not recommend saving on service and the safety of visitors. Otherwise, the object can go into the category of substandard and lose part of the buyers.
New shopping center, does he have a chance?
Despite everything, there are still not enough quality shopping centers in Russia. Therefore, according to experts, it is possible to build as long as the retail is ready to lease premises. In turn, the director of the European Institute of Trade, Bernd Hallir, believes that it is possible and necessary to build new shopping centers today, because the crisis will pass, and they will again become in demand. You just need to seriously think over the concept. As an example of such a plan, Tatyana Aster, vice president for marketing and PR policy of DVI holding, cited the new ComsoMall shopping center in Yekaterinburg, which her company plans to open in 2009. “We changed the concept of the shopping mall quite recently. Initially, it was planned to do a project in the style of Rock & Mall. But it is clear that today he would not be in demand, - Tatiana believes. “Therefore, having relied on discounters and stores operating on the principle of“ everything at the old price ”, we decided to change the concept of the complex and reposition it." This is how ComsoMall appeared, which with its accessibility, slogans and posters is nostalgic for the Soviet times, to some extent consonant with the present. “I believe that those who are just opening their projects this or next year are very lucky,” continues Tatiana Aster. “After all, it is much more expensive now to rebrand a shopping center than to include all possible risks in a new project.”
Yet at the moment, the most successful new project is the Moscow Metropolis, which opened with aplomb at the end of the winter of 2009. Apparently, the developers themselves are wondering if anyone else can repeat this success. Be that as it may, the situation on the market remains complicated and more closely resembles Krylov’s fable “Swan, Cancer and Pike,” when the developer and retailer pull projects in different directions, thereby preventing them from moving and developing. Although today more and more often they speak not about development, but about survival.
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